Research Handbooks on the WTO series
Edited by Tracey Epps and Michael J. Trebilcock
Chapter 9: The limits of PTAs: WTO legal restrictions on the use of WTO-plus technical regulations in PTAs
This chapter provides a legal analysis of technical regulation provisions in regional or other preferential trade agreements (‘PTAs’) under WTO law. This issue is increasingly important with the growth of PTAs, raising the question of whether and to what extent PTA internal integration is consistent with WTO law. Budetta and Piermartini find that 58 of the 70 PTAs they examine contain provisions on technical regulations. There are two main concerns. First, PTAs may engage in internal integration of technical regulation measures in a way that disadvantages suppliers from third states. Second, PTAs may establish internal disciplines on technical regulation measures by member states that strike down these member state measures as applied to suppliers from PTA partners, but not as applied to suppliers from third states. Thus internal integration might require the non-application of a regulatory measure to a PTA partner, while allowing the application of the measure to third countries. For example, in the 2007 Brazil – Tyres case, one of the interesting questions was whether Brazil’s MERCOSUR obligations provide it with an exception from its MFN obligations under GATT, allowing Brazil to discriminate in favor of MERCOSUR-origin retreaded tires. This chapter first examines the ways in which PTA regulation of national technical regulation measures may contribute to or detract from liberalization goals. It then describes how GATT Articles I and III, the TBT Agreement, GATT Article XXIV and the Understanding on the Interpretation of Article XXIV (the ‘Understanding’), as presently understood, regulate PTA regulation of national technical regulation measures.
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